NEW YORK (TheStreet) -- Shares of Centene Corp  (CNC) - Get Centene Corporation Report were rising, higher by 1.39% to $73.93 in pre-market trading Monday, after analysts at FBR Capital Markets upgraded the health insurer to "outperform" from "market perform" this morning.

FBR Capital pointed to the recent weakness in shares after announcing the acquisition of Health Net (HNT) for $6.3 billion in cash and stock.

FBR analysts added that the purchase will give Centene some unique attributes and a big presence in California.

Centene said that with the addition of Health Net, it hopes to boost its position in the Medicaid business.

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St. Louis-based Centene Corp is a healthcare company that provides programs and services to government sponsored healthcare programs.

Separately, TheStreet Ratings team rates CENTENE CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CENTENE CORP (CNC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 12.9%. Since the same quarter one year prior, revenues rose by 48.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CENTENE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CENTENE CORP increased its bottom line by earning $2.22 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($2.78 versus $2.22).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 91.0% when compared to the same quarter one year prior, rising from $32.98 million to $63.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, CENTENE CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 82.45% and other important driving factors, this stock has surged by 84.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: CNC Ratings Report